Published on and written by Cyril Jarnias
Setting up a company in Bulgaria remains one of the most attractive options in the European Union: a symbolic minimum capital, competitive taxation, fast formalities, and the ability to manage everything remotely. But behind this apparent simplicity lies a highly structured legal and tax framework. Before starting, it is best to have a solid checklist to avoid unpleasant surprises.
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This practical guide summarizes 20 essential points to check before setting up a company in Bulgaria, including company law, accounting, VAT, labor law, and residence, based on current Bulgarian legislation and its applicable thresholds.
1. Choosing the Right Legal Form and Structure
The first strategic choice concerns the type of structure. In Bulgaria, the most common forms for an entrepreneur or a foreign investor are the EOOD, OOD, EAD, and AD.
The EOOD is a single-member limited liability company (equivalent to a single-member LLC). The OOD is the multi-member version. In both cases, the liability of the members is limited to the amount of their contribution. The EAD and AD are joint-stock companies, which are heavier and require more capital.
Neither the members nor the manager need to be Bulgarian or residents: a non-resident can hold 100% of the shares and manage the company, with at least one individual manager, without any obligation to live in Bulgaria.
Before registering, it is necessary to decide on the company name, the future manager, the members, the distribution of capital, the duration, and the corporate purpose. These elements will be incorporated into the articles of association (or incorporation deed for an EOOD), which in Bulgaria must be drafted in the Bulgarian language, even if an English version can be prepared for internal understanding.
2. Checking Name Availability and Reserving It
The business name is regulated and must be checked with the Commercial Register (Търговски регистър), maintained by the Registry Agency. The name must be unique nationwide and must not be misleading regarding the activity carried out. It can be in Cyrillic or Latin alphabet, but the official version in the register is in Bulgarian.
Before filing the application, it is recommended to prepare at least three name variants, as availability is only known after querying the register. A formation agent or lawyer usually performs the check and reservation. This step is part of the 1 to 5 days needed for preparation before creation.
The capital is a key point, both for the creation and for the company’s image. The legal thresholds are particularly low for Bulgarian LLCs.
Comparison of Minimum Legal Capital
| Company Form | Minimum Legal Capital | Approximation in Euros | Specifics |
|---|---|---|---|
| EOOD / OOD | 2 BGN | ≈ €1 | Very symbolic capital, can be higher if desired |
| AD (JSC) | 50,000 BGN | ≈ €25,565 | Capital must be fully subscribed at incorporation |
| EAD | 50,000 BGN | ≈ €25,565 | Single-member variant of the JSC |
For EOOD/OOD, 2 BGN is legally sufficient, but a company that wants to inspire confidence with banks or partners may choose a higher amount. In practice, the capital must be deposited into a designated account (collection account) in the name of the company being formed, before registration. The bank issues a deposit certificate, which must exactly match the capital stated in the articles of association.
If the declared capital exceeds the legal minimum, 70% of this amount must be effectively paid into the accumulation account before the registration application. Otherwise, the creation procedure is legally flawed.
4. Anticipating Bank Account Opening and Its Constraints
Opening a bank account in Bulgaria is not a simple formality, especially for a foreign founder. It takes place in two stages: capital account (before registration) then current operating account after obtaining the identification code (EIK/UIC).
For the capital account, the bank generally requires:
– the draft articles of association or incorporation deed;
– the decision appointing the manager;
– identification documents of the signatories;
– notarized power of attorney if a third party opens the account;
– possibly a notarized signature specimen of the manager.
After registration, opening the current account requires the commercial register extract with the EIK, updated articles of association, tax documents, and the anti-money laundering ultimate beneficial owner declaration.
Bulgarian banks enforce a strict KYC. The manager often needs to appear in person at the branch for a detailed interview about the business model, source of funds, and expected transaction flows. Activities related to crypto-assets are generally poorly accepted. The in-branch appointment typically lasts between 30 and 60 minutes, but the full process (internal checks) can take 3 to 6 weeks.
In parallel, some founders opt for an EMI solution (Revolut Business, Wise, Payhawk) which allows 100% online account opening, in 5 to 15 days, with a European IBAN.
5. Understanding the Overall Cost of Creation and Startup
Even though Bulgaria remains one of the cheapest countries to set up a company, the actual budget depends on several items: register fees, notary, bank, translation, professional fees, accounting, registered office.
Examples of Creation Cost Ranges (EOOD)
| Scenario | Main Components | Estimated Range |
|---|---|---|
| DIY, founder on site | Register fees (55–110 BGN), notary, bank, minimum capital | ≈ €224–307 |
| With agent, founder on site | Agent/lawyer fees, official fees, notary, bank | ≈ €400–800 |
| Remote creation | Agent fees, apostille & legalization, translations, official fees | ≈ €800–1,500 |
Registration fees with the Commercial Register are halved when filing online with a qualified electronic signature: 55 BGN (≈ €28) instead of 110 BGN (≈ €56) for paper filing. Notary costs for the signature specimen remain modest (a few euros), while sworn translations and apostilles can quickly amount to €100–300 depending on the volume and country of origin of the documents.
The annual cost of domiciliation for a virtual address amounts to a few hundred euros.
6. Mastering the Registration Procedure Before the Commercial Register
Formal creation is carried out with the Registry Agency, via the Commercial Register. The file includes:
– Form A4 (registration application);
– the articles of association or incorporation deed (in Bulgarian);
– the minutes of the constituent meeting (or decision of the sole member);
– the decision appointing the manager;
– the notarized signature specimen of the manager;
– the manager’s declaration attesting to the accuracy of the information and the absence of disqualifications;
– the registered office agreement (lease or domiciliation);
– the bank certificate of capital deposit;
– proof of payment of the registration fee.
Filing can be done in person at the counter or online using a qualified electronic signature. Online, processing is generally faster. In practice, registration in the register takes approximately three working days. Once the company is registered, it receives a unique identification code (UIC/EIK), which serves as its legal identification number and, in many cases, its tax number.
7. Preparing the Registered Office and Legal Address
Every Bulgarian company must have a physical address within the country, which will be published in the register and used for all official notifications. It is not mandatory to lease an office; foreign entrepreneurs often use a virtual office or domiciliation service, which provides an address and handles mail reception.
The registered office agreement or the owner’s consent must be attached to the registration file, with the full address and the period covered. Without this document, the registration will not be accepted.
8. Anticipating the Accounting Framework
In Bulgaria, corporate accounting is governed by the Accountancy Act. This law defines the requirements for bookkeeping, accounting systems, inventory, document retention, and the presentation of financial information.
Companies can choose between two main frameworks:
– National Accounting Standards (NAS) and the simplified NFRSSME system for SMEs;
– IFRS (International Financial Reporting Standards), as adopted by the European Commission.
Certain entities (listed companies, banks, insurance companies, etc.) must apply IFRS. Others may opt for IFRS, but this choice is irreversible: they will not be able to revert to national standards (NAS).
The accounting policy is set by the manager before the start of the relevant financial year and must be stated in the annual financial statements. Companies must notably keep a chronological journal, a general ledger, and an inventory book, without erasures or blank spaces, in paper or electronic form, with a ten-year retention obligation.
9. Understanding Company Size Classification and Its Impacts
Bulgarian law distinguishes different categories of companies (micro, small, medium, large) based on total assets, net turnover, and average number of employees. The thresholds have been updated as part of recent amendments.
Size Criteria (New Main Thresholds)
| Category | Assets (book value) | Net Turnover | Average Employees |
|---|---|---|---|
| Micro | Up to 900,000 BGN | Up to 1,800,000 BGN | Up to 10 |
| Small | Up to 10,000,000 BGN | Up to 20,000,000 BGN | Up to 50 |
| Medium | Up to 50,000,000 BGN | Up to 100,000,000 BGN | Up to 250 |
| Large | Above these thresholds | Above these thresholds | More than 250 |
This classification affects several obligations: form of financial statements (abridged or full), need for a statutory audit, sustainability reporting requirements, etc. For example, micro and small entities can produce abridged balance sheets and income statements, while medium and large companies are subject to more comprehensive obligations and systematic audits.
10. Knowing Whether Your Accounts Will Need to Be Audited
The statutory audit regime is defined by the Independent Financial Audit Act and the Accountancy Act. Generally, medium-sized and large companies are always subject to audit. Some small entities must also have their accounts audited if they exceed at least two of the following thresholds:
– total assets exceeding BGN 2 million (or, according to recent amendments, BGN 4 million in some cases);
– net turnover exceeding BGN 4 million (or BGN 8 million in the latest version);
– average number of employees exceeding 50.
Audit is mandatory for public interest entities (banks, insurance companies, listed companies, UCITS, pension funds, etc.), regardless of their size. All joint-stock companies (AD) and limited partnerships by shares must also be audited, except if they had no activity during the financial year.
The audit must be performed by a registered statutory auditor, in accordance with International Standards on Auditing (ISA). As the exact thresholds may evolve, it is prudent, from creation, to consider the growth trajectory to determine whether an audit will be required in the short term.
11. Mastering Financial Reporting and Sustainability Obligations
All Bulgarian companies must prepare annual financial statements including at least a balance sheet and an income statement. For micro and small entities, abridged formats are allowed. The accounts must be filed and published with the Commercial Register, within a deadline set by law (a deadline that has been unified and shortened for some categories, with increased penalties for delays).
Bulgarian legislation has integrated European non-financial reporting requirements, which implies the gradual replacement of the former “non-financial declarations” with sustainability reports.
– Large public interest entities with more than 500 employees are the first affected;
– then the obligation is extended to all large companies;
– finally, certain listed SMEs or specific financial entities also come within scope, according to a gradual three-year timeline.
Before setting up your company, it is useful to check whether your project might quickly fall into these categories (for example, if you are considering an IPO or a regulated financial activity).
12. Integrating Changes Related to Euro Adoption
Bulgaria is adopting the euro as its official currency, with an irrevocable conversion rate fixed at 1 EUR = 1.95583 BGN. From the euro switchover, all legal values will gradually be re-evaluated in euros: share capital, VAT thresholds, financial statements, prices, salaries.
For companies:
The capital registered in leva must be converted into euros by decision of the sole member or the general meeting, with filing in the Commercial Register. The articles of association must be updated to replace BGN amounts with EUR amounts (capital, nominal value of shares, internal thresholds). VAT invoices, accounting software, cash register systems, and e‑invoicing solutions must be set up to issue in euros. Payroll must be recalibrated in euros: amend employment contracts, update software and coordinate with social authorities. Bank accounts and credit contracts switch to euros, with notification to banking partners. Towards consumers, dual pricing (BGN/EUR) may be required during a transitional period.
Any company creation project near the date of adoption of the euro must integrate these adjustments into its roadmap and budget.
13. Understanding in Detail the New VAT Logic and the €51,130 Threshold
Bulgarian VAT is governed by a turnover threshold for mandatory registration. As of the euro adoption, this threshold is set at €51,130 per calendar year, corresponding to BGN 100,000 in the old framework. It applies to taxable turnover realized within Bulgarian territory.
Important new logic: the calculation period for turnover is no longer a rolling 12-month period, but corresponds to the calendar year from January 1 to December 31. Monitoring must be done day by day during the current year. As soon as the total exceeds €51,130, a VAT registration application must be submitted within 7 days, and the VAT number takes effect the day after the threshold is exceeded. Any delay exposes the company to penalties.
Since a recent update, the calculation of the threshold includes certain exempt real estate transactions and financial services previously excluded. However, dividends received, disposals of fixed assets, and certain exempt financial or insurance activities generally remain outside the calculation scope.
Below the threshold, the company may opt for the domestic small enterprise exemption regime: it is not subject to VAT on its local sales if conditions are met and its annual turnover in each member state remains below the national threshold. At the EU level, an optional cross-border SME regime is available for small enterprises that do not exceed €100,000 in total EU turnover.
14. Identifying VAT Triggers Beyond the Simple National Threshold
Even without exceeding the €51,130 threshold, other situations may make VAT registration mandatory:
VAT registration in Bulgaria is mandatory in several cases: upon the first physical importation of goods by a non-EU company; when intra-Community acquisitions exceed BGN 20,000 per year; for receiving services under reverse charge above certain amounts, from the EU or third countries; for supplying digital B2C services to EU consumers exceeding €10,000 in distance sales (via the One Stop Shop OSS); and finally, when operating FBA logistics or dropshipping schemes with stock movements between member states.
Non-EU established companies often have an effective zero threshold for VAT: they must register before their first taxable transaction in Bulgaria. For non-EU digital service providers to Bulgarian consumers, the obligation arises from the first sale.
15. Planning Corporate Income Tax and Filing Obligations
Bulgaria applies a flat corporate income tax rate of 10% on taxable profit, making it one of the most favorable environments in the EU. Companies must register with the National Revenue Agency (NRA) within days of their registration or start of activities.
Annual filing obligations include:
The corporate income tax return must be filed only online with a qualified electronic signature. The annual activity report must be attached to this tax return. Payment of the final tax balance is generally due by June 30 of the year following the financial year.
Depending on the turnover, CIT advance payments must be made:
– no advances if the turnover of the reference year is BGN 300,000 or less;
– quarterly advances if turnover is between BGN 300,000 and BGN 3,000,000;
– monthly advances if turnover exceeds BGN 3,000,000.
New companies are exempt from advances for their first year of activity. The difference between advances paid and the final tax is reconciled when filing the annual return.
16. Mapping Licenses and Authorizations Specific to Your Activity
Many activities in Bulgaria cannot start based solely on company registration. They require a license, registration, or specific notification with a sectoral authority.
Among the most common examples:
Activities requiring specific licenses or registrations in Bulgaria
Trade, production, catering, food e-commerce: registration with the Bulgarian Food Safety Agency, HACCP plan, and premises inspection.
Pharmacy, health products, medical devices: authorization from the Medicines Agency.
Banks, fintech, insurance: licenses from the Bulgarian National Bank or the Financial Supervision Commission (Financial Markets Act).
Passenger or goods transport (licenses from the Automobile Administration Agency), private security (license from the Ministry of Interior).
Travel agencies and tour operators: registration with the Ministry of Tourism.
Gambling (specific license), private education, clinics, veterinarians, alcohol, tobacco, construction, energy: various licensing and authorization regimes.
Examples of Costs and Timelines for Certain Licenses
| Activity | Competent Authority | Public Fee Range (Indicative) | Indicative Timeline |
|---|---|---|---|
| Food trade/catering | Food Safety Agency (БАБХ) | 30–50 BGN (state fees) + legal fees 500–600 BGN | Up to 14 days |
| Pharmacy / medical products | Medicines Agency (ИАЛ) | 1,000–2,000 BGN (state fees) + ≈ 1,000 BGN in fees | Up to 30 days |
| Transport license | Automobile Administration Agency | ≈ 300 BGN + fees 500–1,000 BGN | ≈ 30 days |
For certain professions (doctors, lawyers, certified accountants), recognition by a professional body is also required before providing services.
17. Structuring Employment Relations and Social Obligations from the Start
Any company planning to hire must review the Bulgarian Labor Code. Employment contracts must be in writing and registered with the National Revenue Agency within three days of signing. The employee must receive a copy of the contract and the registration notification before starting work.
The maximum working time is 40 hours per week.
The Bulgarian social system is based on contributions shared between employer and employee. The employer’s share for social security (pensions, unemployment, maternity) is around 18.92% to 19.62% of gross salary, and the health insurance contribution is 4.8% of gross salary. Overall, this represents a significant total cost that must be included in the business plan.
In case of dismissal for economic reasons (redundancy or partial closure of activity), the employee is entitled to compensation of at least one month’s gross salary. For other specific reasons (long-term illness, retirement), up to two months may be due.
18. Integrating the Possibilities (and Limits) of Using the Company for Residence Procedures
Creating a company in Bulgaria, by itself, is not sufficient to obtain a right of residence. Several pathways exist for third-country nationals (non-EU) who wish to combine an entrepreneurial project with residence:
Three mechanisms allow obtaining a residence permit in Bulgaria: 1) Employer of at least 10 Bulgarian full-time employees: one-year renewable residence permit, via a D visa then residence application. 2) Commercial representation of a foreign company: up to two representatives can obtain a renewable permit, under conditions (parent company of 2 years, good tax standing, turnover ≥ €51,130/year). 3) Startup visa: for an innovative project, a one-year certificate from the Ministry of Innovation, then a D visa and residence permit, with ownership of at least 50% of the Bulgarian company’s shares.
In all cases, obtaining a D visa precedes the application for residence, procedures are carried out with the Migration Directorate, and the residence permit must be renewed. After 5 years of continuous legal residence (without prolonged absences), a resident may apply for permanent residence, then, after another period, for citizenship.
19. Immediately Setting Up a Robust Accounting and Documentation System
From the first day of activity, the company must keep its books in accordance with the Accountancy Act. This involves:
– a journal recording each transaction chronologically;
– a general ledger itemizing movements by account;
– an inventory book listing assets and liabilities.
Documents must be free of blanks or alterations, kept for at least ten years (paper or electronic), and the annual financial statements published with the Commercial Register within the legal deadlines, under penalty of increased fines.
The support of a local accounting firm, familiar with Bulgarian rules and interactions with the National Revenue Agency, is not a luxury but a practical necessity.
20. Checking the Overall Coherence of the Project: Taxation, Governance, Growth
Before clicking “submit” for registration, it is useful to do a final review of all the points on the checklist:
Before launching your structure, validate six essential points: 1) the legal form adapted to size, governance, and investors (e.g., AD for listing); 2) capital and shareholding compatible with fundraising, shareholder agreements, and voting arrangements; 3) accounting policy (NAS or IFRS) consistent with the sector, size, and partners; 4) the turnover trajectory integrating VAT, audit thresholds, and sustainability obligations; 5) screening activities for licenses or authorizations (including e-commerce of regulated products); 6) the budget including creation costs and recurring expenses (accounting, payroll, domiciliation, audits, licenses, residence permit renewals).
A Bulgarian company can be registered in a few days at a modest cost, but the success of a project rests on the meticulous preparation of these 20 points. By addressing from the outset the issues of the legal, tax, accounting, social, and regulatory framework, the entrepreneur gives themselves the opportunity to fully enjoy Bulgaria’s advantages as a business platform within the European Union, without wasting time on post-hoc regularizations or jeopardizing their tax benefits or access to the internal market.
BEFORE YOU ACT
A checklist cannot judge your specifics.
An independent review weighs the twenty points against your own situation, so you act on the ones that actually concern you.
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FAQ
1.What is the first thing to check before filing?
The legal form (EOOD/OOD fits most founders) and the capital, then the banking route and the substance story. Everything downstream depends on these.
2.Which points do founders usually skip?
VAT triggers beyond the domestic threshold, audit and size classification, activity-specific licences, and the overall coherence of the project.
3.Why is the bank on the checklist so early?
Because most files fail at the bank, not at the registry: KYC, source of funds and substance decide, and a refusal invalidates a registration done later.
4.What is the VAT threshold?
€51,130 of domestic turnover per calendar year, with mandatory registration within seven days of crossing it.
5.When is a company really ‘finished’?
Not when the extract is issued. It is finished when it can operate, pay taxes, receive money and survive its first inspection.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
